EDITOR'S CHOICE -- SCOTT SUTTELL

Hot auto industry makes for happy car sellers

The U.S. auto industry is back in overdrive as General Motors Co., Ford Motor Co., Chrysler Group LLC and Toyota Motor Corp. all reported robust increases in vehicle sales for August.

“Low interest rates and slow-but-steady job growth are emboldening consumers to trade in worn-out cars and trucks that still average about 11 years old, even after months of steadily improving new vehicle sales,” according to MarketWatch.com. “The faster-than-expected rebound in the U.S. auto market is a bright spot for global auto makers coping with slumping demand in Europe and uncertainty in some big developing markets they are counting on for growth.”

Doug Waikem, owner of the seven-dealership Waikem Auto Group in Massillon, says, “It was just phenomenal. The market is real strong right now. For us in this area, which is the Rust Belt, it hasn't been like this since the '80s.”

Some major auto makers have yet to report August results, but industry executives and analysts “said the annualized selling pace for the month could come in above 16 million vehicles for the first time since December 2007,” according to the story.

“In 2013, leasing has accounted for 26 percent of new-vehicle purchases, according to Edmunds.com,” The Times says. “In the years before the recession, leasing accounted for 16 percent to 20 percent, with activity focused on high-end cars and trucks.”

Kirt Frye, president of Sunnyside Automotive Group in Middleburg Heights, tells the newspaper, “Leasing has made an amazing recovery.” Higher residual values, thanks to a robust used car market, and record low interest rates mean lower monthly payments for buyers with good credit, he says.

At Sunnyside, leases make up one out of three vehicles sold at the dealership's Chevrolet, Toyota, Honda and Mitsubishi marquees, Mr. Frye notes. That rate is up from one out of five vehicles sold 18 months ago, The Times says.

Generation next

Ohio companies take two of the 10 slots on this alphabetical list from Site Selection magazine of the “Top Utilities in Economic Development for 2013.”

The criteria: “Analysis of corporate end-user project activity in 2012 in that company's territory; website tools and data; innovative programs and incentives for business, including energy efficiency and renewable energy programs; and the utility's own job-creating infrastructure and facility investment trends.”

Site Selection says AEP “last year helped bring in 16,339 jobs and more than $2.2 billion in investment, including projects from such companies as Benteler Steel in Shreveport, La.; Vaughan-Bassett Furniture in Galax, Va.; Caiman Energy in West Virginia; and Discover Card in New Albany, Ohio, as well as Garmin in Tulsa, Okla; Caterpillar in Victoria, Texas; and Tenneco in Ligonier, Ind.”

A FirstEnergy team led by Patrick J. Kelly, director of economic development, “helped $2.7 billion of projects come to pass in its six-state, 65,000-sq.-mile territory, which will create 7,900 jobs,” according to the magazine. Those projects include locations and expansions from the likes of Target and Rubbermaid in Ohio; Rocky Gap Casino in Maryland; Thor Labs in New Jersey and East Penn Manufacturing and Aquion Energy in Pennsylvania.”

FirstEnergy “also continues to push the envelope when it comes to smart-grid and renewable power,” Site Selection says. The company “has more than 2,400 MW of hydro, pumped-storage hydro, wind and solar generation either owned or under contract.”

Fed watching

Normal people do not care who wins the race to succeed Ben Bernanke as chairman of the Federal Reserve.

CNNMoney.com says current Federal Reserve vice chair Janet Yellen, once the frontrunner, is now a distant second to Larry Summers, the former Treasury secretary and adviser to President Obama, according to betting site Paddy Power.

“But just because gamblers have a favorite candidate, doesn't mean the financial markets really give a hoot,” the website says. Since Summers vs. Yellen became a thing about a month ago, stocks have barely moved, exchange rates have been stable and inflation expectations haven't budged.

However, “general uncertainty about the rest of the Fed's leadership could be having a bigger impact than the Summers vs. Yellen debate, as four other top Fed officials could be leaving their posts in the months ahead,” CNNMoney.com says.

“Fed governor Elizabeth Duke is retiring, Gov. Jerome Powell's term expires in January, and Gov. Sarah Bloom Raskin is taking a number two position at the Treasury Department,” according to the story. “And Cleveland Fed President Sandra Pianalto, who was slated to be a voting member on the Fed's policymaking committee next year, is also stepping down.”

If Mr. Summers gets Mr. Bernanke's job, the story notes, “it's unclear if Yellen would also leave the Fed. If she does, that would leave a sixth seat vacant among the 12 central bank voters.”

Why are empty seats an issue?

CNNMoney.com explains it this way:

Under Bernanke's leadership, Fed officials have relied partially on a communications tool known as "forward guidance," in which they alert the public of how long they plan to keep interest rates near zero.

The problem is, can their viewpoints truly be considered credible if half the key decision-makers are checking out soon?

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